Back in the days this was a favorite leading indicator for what was to come for the overall market. It peaked ahead of the market in November 1972 before the 73/74 market debacle and peaked in January 87 before the August peak and the eventual crash in October to name just a few. Technicians such as Edson Gould and Norman Fosback swore by the Utility divergence indicator. This used to be one of my favorite indicators. However, haven't watched it in over 15 years as I went to a strictly price only methodology.
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Yes, I have been watching the utility sector because it a one of the minor sectors of the S&P 500 Index and one that I try to keep at least a five percent position in within my overall portfolio. Within the past five years I have held, at times, up to about twenty percent in the utility sector. Today, as I write, it is now about eight percent.
Through the years I have also noticed that the utility sector seems to forecast coming interest rate headwinds. Now, since I don't own any utility stocks anymore it will be interesting to see if my mutual fund portfolio mangers that do hold utility stocks will start to trim positions. Perhaps with the recent FCC ruling on the internet as becoming a utility some fund managers now might start picking up some tech companies.
Know, I look at this frequently ... and, M* has utilities as an overvalued sector in it's Market Fair Value Graph currently by about eight percent which is down from a recent high of slightly less than twenty percent.
My best to you ...
Old_Skeet
Recent thread started by Post & Lineman Ted:
mutualfundobserver.com/discuss/discussion/19237/chuck-jaffe-s-money-life-show-guest-skip-aylesworth-manager-hennessey-gas-utilities-index-fund/p1
Japan holding up very well YTD as well as today. Any J-apan-unkster interest @Junkster?